Statistics Canada
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Our collective net worth
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Much as a family or business sits down to calculate its net worth-or the value of what it owns minus how much it owes-economists use balance sheets on an economy-wide basis to determine a nation's overall net worth.
The numbers at the national level have grown dramatically in recent years. The combined net worth of all sectors of the country-individuals, businesses and the government-reached a record $4.2 trillion by the end of the fourth quarter in 2004, or $131,700 for every Canadian. Since 1999 alone, our collective net worth has grown 34%.
A closer look at the balance sheet reveals some telling patterns.
The increase in household net worth has been driven largely by rising
real estate values. However, Canadians are taking on more debt to
finance this investment in their homes. Over the past few years,
consumers have financed their spending and housing purchases by steadily
reducing their savings rates and borrowing more than ever before.
In contrast, Canadian corporations have been reducing their debt levels. Since 2000, they have generated more money than they have needed to finance their capital investments. This surplus revenue has allowed Canada's businesses to pay down their debts and to become net lenders to the rest of the economy.
Government net debt (total liabilities less total financial assets) has been edging down as the federal government registered another surplus for the seventh consecutive year in 2004. Net government debt as a percentage of gross domestic product (GDP) reached a 20-year low, and stood at roughly half of GDP. In addition, the recent increase in the value of the Canadian dollar against other currencies has reduced the actual value of the debt that governments owe in other currencies.
